Nielsen Holdings reached an agreement to be acquired by a group of private-equity investors led by Elliott Investment Management and Brookfield Business Partners in a deal worth $16 billion, including Nielsen debt.
The deal comes as Nielsen has been under pressure from investors for a falling stock price and by the media industry for its slow response to measuring a more complex media environment in which fewer people are watching traditional TV and more are streaming.
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After rejecting an earlier bid, Nielsen’s board accepted an offer that will pay shareholders $28 a share in cash. The board said this represents a 10% increase over the previous proposition and a 60% premium over Nielsen’s stock price on March 11, before Nielsen’s stock started rising on takeover speculation.
"After a thorough assessment, the board determined that this transaction represents an attractive outcome for our shareholders by providing a cash takeout at a substantial premium, while supporting Nielsen's commitment to our clients, employees and stakeholders,” Nielsen board of directors chair James A. Attwood said. “The Consortium sees the full potential of Nielsen's leadership position in the media industry and the unique value we deliver for our clients worldwide.”
Despite the disruption a takeover might add to the pressure on Nielsen, the company, led by CEO David Kenny, maintains that it is on track to deliver Nielsen One, its new measurement system designed to make all viewing comparable and consistent.
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“After months of deep market analysis, industry diligence and management reviews, we are firmly convinced that Nielsen will continue to be the gold standard for audience measurement as it executes on the Nielsen One roadmap,” managing partner Jesse Cohn and senior portfolio manager Marc Steinberg said on behalf of Elliott and its Evergreen Coast Capital affiliate.
“Having first invested in Nielsen nearly four years ago, we have a unique appreciation for the company's ongoing relevance to the global, digital-first media ecosystem,” they said. “Today’s outcome represents a significant win for Nielsen's shareholders and for the business itself, as our multibillion-dollar investment will help Nielsen reinforce its transformation at this critical inflection point. We are pleased to partner with David and the existing management team to lead Nielsen after the transaction is completed.”
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The transaction agreement provides for a “go-shop” period, during which Nielsen — with the assistance of its financial advisers, J.P. Morgan and Allen & Co., and its legal advisers — will actively solicit, evaluate and potentially enter into negotiations with parties that offer alternative acquisition proposals. The go-shop period expires in 45 days,
A competing bidder who makes a superior proposal would bear a $102 million — 1% of equity value — termination fee payable by Nielsen if the measurement company terminates the transaction agreement with the consortium to accept another proposal.
Elliott has owned a stake in Nielsen since 2018 and was critical about its financial performance in 2020. Pressure from Elliott led to Nielsen cutting costs and selling its Global Connect business for $2.7 billion in 2021.
Nielsen has long been criticized by the television industry it measures, but the negative headlines have intensified in the last year.
Nielsen’s accreditation was suspended last September after the Media Rating Council — which reviews media measurement companies — confirmed that Nielsen had been underreporting viewing during the pandemic. The undercount was largely the result of a decline in the number of homes in Nielsen’s sample and the quality of data coming from those homes because Nielsen was unable to monitor those homes in person because of COVID-19.
TV networks complained that the undercount has cost them hundreds of millions of dollars in lost ad revenue. With Nielsen unaccredited, networks have been more aggressive in seeking alternate measurement companies. NBCUniversal announced that it would do some deals based on data from iSpot.TV. Other media companies, including Paramount and WarnerMedia, are also testing alternate currencies using data from Comscore and VideoAmp for buying and selling advertising.
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Nielsen has been eager to regain accreditation from the MRC. Last week, the MRC said it expects its audit of Nielsen’s national and local ratings services to last through the third quarter, after the upfront ad market takes place. ■
